BACKKGROUND TO THE STUDY
According to Phillips (2004), computers are here with us to improve the level of efficiency and to speed up all activities that need to be done.
A computer is a device or machine for making calculations or controlling operations that are expressible in numerical or logical terms. Modern computers are electronic and digital. The actual machinery wires, transistors and circuits is called hardware; the instructions and data are called software.(http://www.webopedia.com/TERM/C/computer.html).
financial management especially the accounting section is of crucial importance to the success of any organization because it deals with the classification, analyzing and summarizing of financial information of an organization.
Organizations have therefore computerized their financial systems in a bid to make work easier, faster and therefore produce statements on time. Computerization of the accounting system is a necessity because of the many functions of accountants which are repetitive and require accuracy and speed that the computers can provide.(Oliver and Chapman 1990)
The idea of publishing financial statements at least to members, is a consequence of the development of the concept of limited liability and the spread worldwide of the company with share capital as the main form of organization for larger companies.(Nkundabanyanga K.Stephen).
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During the accounting cycle, accountants track, organize and record the financial dealings of a company. At the close of each period, accountants use the information they’ve gathered to prepare financial statements. Income statements, statements of capital, balance sheets and cash-flow statements are four common financial reports.
An income statement is a type of summary flow report that lists and categorizes the various revenues and expenses that result from business operations during a given period –a year, a quarter or a month. The difference between revenues and expenses represents a company’s net income or net loss.
The statement of capital shows changes in owner’s capital over time. If you are a business owner, your capital account represents how much of your company you own. At the close of the accounting cycle, any net income becomes yours. Statements of capital are prepared after the income statement.
The balance sheet is based on this equation: assets=liabilities owner’s equity. It lists everything your company owns (assets), everything your company owes to creditors (liabilities) and the value of your ownership stake in your company (owner’s equity or capital).It shows the company’s financial position at a specific point in time.
The cash-flow statement shows all sources and uses of a company’s money during the accounting period. Sources of cash listed on the statement include revenues, long-term financing, sales of non current assets, and an increase in any current liability account or a decrease in any current asset account.
According to International Accounting Standard 1(IAS1), financial statements are to be prepared and presented at the end of every financial period and in compliance with the IFRS. Penalties and fines are charged for untimely submission of financial statements. For example; Paralegal Tech Institute 2 Pealman Drive, Suite L-1, Spring Valley, NY, 10977. Agreement executed on October 31,2006 for not submitting a timely appropriate financial statement for the school’s fiscal in violation of Article 101 of the Education Law and part 126 of the Commissioner’s Regulations.
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... The proposed system can’t print student patient personal information. It can’t print the sales and financial statement. And also ... into computerized system • Analyze the possible cause of the problem and solve it by developing the usual system that the company ... some erasures and errors. Theoretical Framework Management Information System is a system wherein everything is well organized, concise, ...
Financial information is useful when it is relevant and represents faithfully what it purports to represent. The usefulness of financial information is enhanced if it is comparable, verifiable, timely and understandable. [F QC4].
Timeliness means that information is available to decision-makers in time to be capable of influencing their decisions. [F QC29]
PROBLEM STATEMENT
Kalugayi (1996) says that timeliness of reports is critical to clients for decision making and in some cases says that delays of reports is the main reason for the failure of most firms.
But untimely preparation of financial statements and reports still remains an issue of concern in some organizations.
Organizations have therefore implemented computerized financial management systems to substantially reduce the time taken to produce and present reports for clients.
Despite the computerized financial management systems, organizations are still experiencing untimely financial reporting; “Finance institutions such as Pride Microfinance Ltd……the whole reporting process and also resulted into delayed, poor and untimely reporting.”(http://dspace.mak.ac.ug).
This could partly be due to the poor compatibility of the employees to the computerized system, lack of motivation of the employees (accountants), corruption and bribery especially from management, weak internal controls and poor management.
Failure to address this problem will lead to presentation of inaccurate and poor statements, poor public image of the organization, loss of clients and potential shareholders and it will eventually threaten the going concern of the organization.
OBJECTIVES
• To investigate the causes of delays in preparation of financial statements.
• To examine the effectiveness of computerized financial management systems.
• To evaluate the relationship between computerized financial management systems and the speed in preparation of financial statements.
RESEARCH QUESTIONS
• What are the causes of delays in preparation of financial statements?
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• How effective are the computerized financial management systems?
• What is the relationship between computerized financial management systems and the speed in preparation of financial statements?
VARIABLES.
Independent variable;
Computerized financial management systems
Dependent variable;
Untimely preparation of financial statements
CONCEPTUAL FRAME WORK (DIAGRAM)
METHODOLOGY
1. Introduction
This section describes and examines how the researcher followed through the research questions during both document review and fieldwork. It details the methods for sample selection, data collection and analysis techniques that were used to make sense of the data in order to draw conclusions. The chapter is comprised of research design, area of study and study population, sampling methods and size, data collection methods and analysis.
11. Research design and strategy
The study will follow descriptive and explanatory research designs. As Crang and Cook (2007:1) have rightly observed: “The basic purpose in using these methods is to understand parts of the world more or less as they are experienced and understood in the everyday lives of people who ‘live them out”. The Explanatory design will basically be used to make sense of the data collected from secondary sources and relate it to data from primary sources. Descriptive design will be used in understanding the electronic financial data processing system in place.
Through these designs, respondents will be able to make their contribution on how the computerized financial management systems are being managed to speed up the preparation and presentation of financial statements and reports.
A cross sectional survey, where data will be obtained with in a given frame not stretching over a long period of time will be used.
The researcher will apply the case study strategy so as to get a deeper understanding of the problem that is the untimely preparation and presentation of financial statements despite the computerized financial systems.
The Research paper on Steps in a case study method
All studies require that a research problem be identified and stated, and must be simple, concise, and in clear terms. Such problem will be the focus of a case study. IDENTIFY THE PROBLEM OF THE STUDY The General and specific objectives of the study must be categorically expressed. Such objectives will be the bases in conducting research activities. State the Objectives of the Study The research ...
111. Survey population
The target population for this study will comprise the different departments in the organization specifically the accountants, audit and the information technology departments. Top management and some other employees in other departments will also be approached.
1V.Sampling designs/strategies
Purposive sampling
This method will be used to select the key informants for this study since it will allow for the selection of sample elements that will give in-depth understanding on matters related with the computerized system and the untimely preparation and presentation of financial statements and reports.
This will be done by personally approaching these respondents for personal interviews.
Stratified random sampling
This will be done to gather information on the comparability of staff with the computerized system and the trend of preparation and presentation of the financial statements.
According to this strategy, the researcher will divide the population into two groups that is; employees that have worked with the organization for more than 5 years and employees that have worked for less than 5 years. The samples in each stratum will be chosen using simple random sampling.
Sample size
According to Kellinger (1983), a sample is representative if it is between 10%-30% of the total population of the study. Hence; a total of 30 respondents will be selected from different departments and interviewed accordingly.
V1.Data sources
Primary sources
Primary data is original in nature and has never been published before.
This data will be collected from the field using questionnaires and personal interviews with the respondents.
Secondary sources
These will be used in the first phase of the study which includes the development of background information, problem statement and literature review. It will also be employed in the later phase though in a very minimal way to give support to some findings or recommendations.
This will be the dominant strategy for data collection. Documents ranging from formal reports, administrative records, policy documents, evaluation reports, and audit reports of the organization, journal articles, unpublished research reports and news paper articles and the internet will be comprehensively reviewed.
The Report on Data: a Collection of Facts
Data- A collection of facts from which conclusions may be drawn 1. Statistics- Referring to data themselves and to the summarization of the data used in an experiment. 2. Bar Graph- A type of diagram that illustrates a frequency of distribution using a bar chart. 3. Pie chart- 4. observation- an act of recognising and noting measurement of some magnitude with suitable instruments 5. Benedict Test- ...
V11.Data collection methods and tools
Diverse methods of data collection will be employed at various stages of this study. The study will triangulate methods of data collection where possible so as to acquire credible data. The data collection methods will include the following:
Questionnaires
The researcher will use structured questionnaires. These questionnaires will consist of open ended and close ended questions where the respondents will freely insert in answers by circling or ticking one of the alternatives given. They will be designed and used to collect information on computerized financial management and untimely preparation and presentation of financial statements and reports. The questions will as much as possible try to tap all the dimensions of the constructs.
Interviews
An interview guide is a research instrument that is used in gathering in-depth information when the subject matter is potentially sensitive and when the issues under investigation would benefit from clarification of issues that are raised. Colin (1993; 47) asserts that a guide “can be focused on a given set of predetermined questions that are covered in turn.” The researcher will use interview guides, which will serve as a useful tool in guiding the discussion and keeping each participant focused on the topic since the issue of financial statements is sensitive. The order in which the questions will be arranged will give the interview a smooth flow, and allow the interviewees to express additional ideas about various issues.
Documentations
The researcher will use this method in gathering of secondary data. It will involve visiting the already existing information. Things like published books, dissertations, journals, audit reports, newspapers and other library collections will be used.
V111.Data processing and analysis
Data Processing
Data collected will be processed and analyzed manually. Editing will be done at the end of each working day to ensure that information given by respondents are accurate. That is; by cross checking wrong entries omissions and inconsistencies made by respondents. The data will be then be coded; this involves translating edited responses into numerical terms / percentages.
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Data analysis.
Data will be analyzed both quantitatively and qualitative. Qualitative analysis will involve deriving explanations and making interpretation of the findings based on the description and to ensure a clear description of the information in selected areas. Quantitative analysis on the other hand will involve deriving statistical description and interpretation of data by use of inferential statistics and use of tables and numbers to portray the information. Triangulation of data collection and analysis will be undertaken to compensate for any methodological limitations and to validate data that emerged from the different research techniques.
REFERENCES.
➢ Kellinger, F.N, (1983), Foundations of Behavioral Research 2nd edition, Rinehart and Wilson Inc New York.
➢ Oliver and Chapman S.F (1996), 10th Edition pg 30-80.
➢ Nkkundabanyanga K. Stephen, Advanced Accounting (practical approach), 1st Edition pg 73.
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➢ http://www.webopedia.com/TERM/C/computer.html
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Computerised financial management systems
Untimely preparation of financial statement
Compatibility to the system
▪ Ethical behavior
▪ Motivation
▪ Management
▪ Internal control systems
Lack of proffessionalism.
Organization policy
